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-YEN: CBA See AUD/JPY Above Y81.00 By Mid '21

AUSSIE

CBA note that "AUD/JPY can continue to appreciate over our forecast horizon. We forecast AUD/JPY will lift towards Y79.50 by end 2020 and then increase to Y81.12 by end‑June 2021. Strong bulk commodity demand from China, and Australia's structurally improved current account position, will be major drivers of a higher AUD/JPY in our view. However, US‑China tensions will remain an intermittent weight on AUD/JPY. There is a risk US‑China relations deteriorate in the lead up to the 3 November 2020 US Presidential Election. The risk is President Donald Trump takes a hard‑line approach to China as part of his election campaign. A sharp deterioration in US‑China relations is a major downside risk to AUD/JPY. Japan's large current account surplus provides substantial support to JPY during times of heightened uncertainty."

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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